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Certified Trust and Financial Advisor (CTFA) Questions 231–235 (page: 48)

Updated On: 9-Feb-2026

A conventional revolving credit agreement allows:

  1. To borrow a fixed amount for the entire commitment period
  2. To borrow for a short-period with a right to renew the loan during the commitment period
  3. To possibly include a provision to convert the credit agreement into a term loan contract at maturity
  4. All of the above

Answer(s): D



The type of lease that includes a third party, a lender, is called a(n):

  1. Sale and leaseback
  2. Direct leasing arrangement
  3. Leveraged lease
  4. Operating lease

Answer(s): C



One advantage of a financial lease is that:

  1. It has a shorter maturity than term loans
  2. It never appears as a liability on the balance sheet
  3. It eliminate the needs to make periodic payments
  4. It provides a way to indirectly depreciate land

Answer(s): D



Medium-term notes (MTNs) have maturities that range up to:

  1. One year (But no more)
  2. Two years (but no more)
  3. Ten years (but no more)
  4. Thirty years (or more)

Answer(s): D



A direct lease, a sale and leaseback, and a leveraged lease are all examples of:

  1. Operating leases
  2. Financial leases
  3. Full-service leases
  4. "off-balance sheet" methods of financing

Answer(s): B



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